Type of Health Insurance Plans
The three major types of health insurance plans on the market these days are Health Maintenance Organizations, Preferred Provider Organizations, and Specified Benefit Plans. Of those three, the most common major medical health insurance is probably a preferred provider plan. Keep in mind, I am discussing health insurance plans for Americans who are under 65. The subject of medicare supplements or medicare advantage plans would belong in a different article. Let me outline the basics.
* Health Maintenance Organization (HMO): You must use a network medical provider who has contracted with the plan in almost all cases. Exceptions may be made for cases where the insurance company does not have a contract for the type of medial provider that your primary care doctor refers you to. You will have to have that exception approved by the insurance company. Exceptions are also made for emergency situations. Almost all of the time you must choose your doctor, hospital, etc from the list of approved (network) providers. In return for this restriction, your out of pocket costs will usually be very low, and you may have very good access to normal services. You may have a lower deductible, and many services may be covered with fairly low copays.
* Preferred Provider Organization (PPO): A PPO is less restrictive than an HMO. A PPO will have a list of preferred providers, and you will have a strong cost incentive to use that network. However, you may choose to use other doctors or hospitals, and still have insurance coverage. You will just be on a different benefit schedule, and your out of pocket costs will be much more. Again, exceptions will be considered for emergency and unique situations. A PPO plan is more flexible than an HMO, but the insurance company may expect you to pay a higher percentage of the bill. Your yearly out of pocket costs may be higher, more services will require you to pay a deductible, and you may not have doctor's visits with copays.
* Specified Benefit Plans: This type of plan may use a network to keep costs down because network providers have agreed to charge less. The network may actually be an extra feature that you pay more to access. The plans contain a schedule of benefits that they will pay for specific events. For instance, they will pay a certain amount for a simple fracture, and another amount for a compound fracture. Deductibles maybe fairly low, or nonexistent , on plans like these. But be aware, the schedule of benefits may not be a realistic amount for major medical expenses. For serious illness, like cancers or strokes, you will probably need a critical illness supplement.
When you are Declined for Health insurance
If you have a pre-existing health condition like diabetes or a history of heart problems, you may be declined for individual health insurance. You still have options. Every state has a high risk program, and you can contact your state's insurance department for contact information. But high risk health programs can still be very expensive. Other options are county health programs or, for lower income people, medicaid.The internet is a great tool for research, or your insurance agent should be able to help you.
